Canada has ability to spy on Brazil, but lacks motive, security officials say

Canadian security officials and mining companies were skeptical Monday over claims Canada had spied on Brazil’s mining and energy department, even as Brazil’s president accused Canada of apparent industrial espionage.

The Brazilian Foreign Minister summoned the Canadian ambassador to “transmit the indignation of the Brazilian government and demand explanations,” the Foreign Ministry said in a statement that followed the revelations that were aired Sunday night on Brazil’s Globo network. The report said the metadata of phone calls and emails from and to the ministry were targeted by Communications Security Establishment Canada (CSEC) to map the ministry’s communications. It didn’t indicate whether emails were read or phone calls listened to.

In Bali, Indonesia, where he was attending an economic conference, Prime Minister Stephen Harper said on Tuesday that he was “very concerned” about the report and added Canadian officials were “reaching out very proactively” to counterparts in Brazil.

Harper said there is a commissioner of the spy agency who audits the CSEC to ensure it operates within Canadian law and added that his the government will be doing what he called “appropriate follow-up.”

Ray Boisvert, who was director general of counter-terrorism at the Canadian Security Intelligence Service, said on Monday Canada would have little reason to spy on Brazil’s mining sector.

“Like any crime drama, you look for capability and intent. Could CSEC do Brazil? Of course, it has significant capability to collect intelligence in the national interest. But on motive, you come up way short. If it was Iran, nobody would be surprised. But this is Brazil,” he said. “I’m really short on motive.”

If it was Iran, nobody would be surprised. But this is Brazil

The Brazilian TV report was based on documents leaked by former National Security Agency contractor Edward Snowden and was the latest showing Brazil has been a target for United States, British and now Canadian spy agencies.

Mr. Boisvert, though, said a leaked document cited by the TV network could show nothing but an exercise.

“If you look at the document, it looks like really more a case of a scenario building exercise,” said Mr. Boisvert, who dealt directly with CSEC, Canada’s electronic eavesdropping agency, and is now president of the consulting firm I-Sec Integrated Strategies.

“We were all too busy chasing bad guys who can actually kill people. The idea that we spend a lot of time, or any time at all, on a country like Brazil is pretty low margin stuff, not likely to happen,” he said.

He said intelligence agencies involved in the growing cyber warfare threat do not test their methods on their actual targets. Instead, they sometimes conduct “paper exercises” using a similar target.

“They have to do paper exercises and say, ‘OK, let’s say our target in counter-terrorism lives in Mali and we have to go up against the Malian telecommunications system.’ They’ll go look at another country and say, ‘OK, well they have a similar network so let’s do a paper exercise and say ‘what do we need?’” he said. “I think that’s all this was.”

In comments Monday on Twitter, Brazilian President Dilma Rousseff said industrial espionage appears to be behind the alleged spying. In her Twitter comments, which the president’s office confirmed were authentic, Ms. Rousseff also instructed Mines Minister Edison Lobao to beef up the ministry’s data protection systems.

Canadian mining firms active in Brazil said they are surprised and baffled by the allegations, and have no knowledge of any spying. But beyond that, they cannot understand why Canadian spies would target this ministry in the first place. They are quite certain it would not be on their behalf.

“Mining companies need their governments from time to time to navigate challenges we get, but I’m pretty sure they wouldn’t spy on people we need for permits,” said Ann Wilkinson, head of investor relations at Colossus Minerals Inc., which is developing a large gold mine in Brazil.

Yamana chief executive Peter Marrone said he spoke to his Brazilian team on Monday morning and the spying issue did not even come up.

“I would have thought there was no economic or political nexus that would suggest to either country to want to know about the other,” he said, also noting that the mining efforts of the two countries are “very distinct.”

We were all too busy chasing bad guys who can actually kill people

Neither CSEC, the Department of National Defence, nor the Department of Foreign Affairs would discuss the matter. “[CSEC] does not comment on foreign intelligence gathering activities. Under the law, this organization cannot target Canadians,” said spokeswoman Lauri Sullivan.

Globo previously reported that the communications of Ms. Rousseff herself, and also state-run oil company Petrobras, were targeted by NSA spying. The fallout over the spy programs led her last month to cancel a planned visit to the United States, where she was to be the guest of honour for a state dinner.

Martin Rudner, distinguished research professor emeritus at Carleton University, said the CSEC is allowed to collect intelligence on foreign governments. Its activities are regularly reviewed by a retired senior judge, he added.

“Canada is not the only country engaged in foreign economic intelligence collection,” he said. “What is more surprising is that the Brazilians seem to be indicating the absence of any counter-intelligence capacity on their part, i.e. a capability to protect sensitive, high-value information against international espionage.”